Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter December 14, 2020

Are Certified Supply Chains More Socially Sustainable? A Bargaining Power Analysis

Paul Muller, Michael Böhm, Péter Csillag, Michele Donati ORCID logo, Marion Drut, Hugo Ferrer-Pérez, Lisa Gauvrit, Jose M. Gil, Viet Hoang, Agata Malak-Rawlikowska, Konstadinos Mattas, Orachos Napasintuwong, An Nguyen, Ioannis Papadopoulos, Bojan Ristic, Zaklina Stojanovic, Áron Török, Efthimia Tsakiridou, Mario Veneziani and Valentin Bellassen

Abstract

Food quality schemes (FQS: organic and geographical indication products) are often supposed to be more sustainable by their political advocates. We explore the social sustainability advantage of FQS through the lens of supply chains’ bargaining power (BP) distribution. We propose an indicator synthesizing different sources underlying BP (competition-based, transactional, institutional) and counting two dimensions (fair BP distribution and adaptation capacity), that we apply to 18 FQS supply chains and corresponding reference. FQS perform better than their reference products on both dimensions. This better performance is due to a combination of sources.


Corresponding author: Paul Muller, BETA, CNRS - University of Lorraine – University of Strasbourg & INRAE, Nancy, France; and CESAER, AgroSup Dijon, INRAE, Univ. Bourgogne Franche-Comté, 21000 Dijon, France, E-mail:

Funding source: This paper is a research output of the Strength2Food project which was funded from the European Union’s Horizon 2020 research and innovation program

Award Identifier / Grant number: 678024

  1. This paper is a research output of the Strength2Food project which was funded from the European Union’s Horizon 2020 research and innovation program under grant Agreement No. 678024. We sincerely acknowledge two anonymous reviewers for their comments that greatly helped in improving the quality of the manuscript.

Annex 1 List of supply chains (FQS and references) and key data sources

SectorFQS productType of FQSCountryMain data sources for the FQSReference productMain data sources for the reference
Cereal/bakeryCamargue riceOrganicFranceKey informant (PGI consortium)Non-organic rice (mostly PGI)Key informant (PGI consortium)
Thung Kula Rong-Hai (TKR) Hom Mali ricePGIThailandKey informant, Napasintuwong (2019)National averageKey informants, Rice Mills Association
Organic flourOrganicFranceAvise and Agence Bio websitesNational averageAgence Nationale de la Meunerie Française website
Organic pastaOrganicPolandKey informant (producer)National averageKey informant
DairyComte cheesePDOFranceKey informant (PDO consortium)National average (cow cheese)France Agrimer (2010, 2011)
Parmigiano Reggiano cheesePDOItalyKey informant, PDO consortiumBiraghi cheese (similar non-PDO cheese)Key informant, ISTAT
Organic yoghurtOrganicGermanyAMI (2017)National averageMIV, Fakten Milch Sept-2017
MeatGyulai sausagePGIHungaryPGI producersNational averageKey informant (Hungarian meat Industry Federation), non PGI producers
Organic porkOrganicGermanyKey informant (Naturland), EcoZeptNational averageEcoZept
Sobrasada of MallorcaPGISpainKey informantNational averageKey informant
Ternasco de AragonPGISpainPGI consortium managerNon-PGI lamb in the same region (Aragon)Key informant, Sierra (2016)
SeafoodSaint-Michel Bay bouchot musselsPDOFranceKey informant (PDO consortium)National average (TSG Bouchot mussels)Oyster general survey
Phu Quoc Fish SaucePDOVietnamKey informants (local expert and PDO consortium)Non-PDO fish sauce from same regionKey informants (local expert and PDO consortium)
Fruit/vegetableBuon ma Thuot coffeePGIVietnamKey informantNon-PGI coffee from Dak Lak province in VietnamKey informant
Kalocsai paprika powderPDOHungaryKey informants (PDO consortium)Imported pepper milled in HungaryKey informants (PDO consortium)
Kastoria applePGIGreeceKey informantKissavos apples (non-GI apples from another region)Key informant
Organic raspberriesOrganicSerbiaOrganic farms registryNational averageOfficial farm registry
Organic tomato from Emilia RomagnaOrganicItalyKey informant, OI Pomodoro da Industria del Nord ItaliaNational averageKey informant, OI Pomodoro da Industria del Nord Italia

Annex 2 Average bargaining power distribution and bargaining power of the weakest level values for each FQS and corresponding reference supply chains: mean values (standard deviation) after 10,000 runs

SectorCase studiedBargaining power distributionBP of weakest level
FQSReferenceMost performant SC (1% significance level)FQSReferenceMost performant SC (1% significance level)
Average (std. dev.)Average (std. dev.)Average (std. dev.)Average (std. dev.)
Cereal / bakeryCamargue Rice0.011 (0.012)0.014 (0.015)FQS0.281 (0.030)0.277 (0.034)FQS
TKR Hom Mali Rice0.007 (0.011)0.000 (0.000)Reference0.697 (0.080)0.215 (0.085)FQS
Organic Flour0.022 (0.019)0.020 (0.018)Reference0.249 (0.040)0.255 (0.039)Reference
Organic pasta0.032 (0.048)0.372 (0.191)FQS0.391 (0.086)0.095 (0.035)FQS
DairyComté cheese0.026 (0.023)0.155 (0.144)FQS0.583 (0.114)0.331 (0.131)FQS
Parmiggiano Reggiano cheese0.002 (0.005)0.047 (0.068)FQS0.646 (0.111)0.337 (0.069)FQS
Organic yoghourt0.013 (0.024)0.115 (0.128)FQS0.455 (0.096)0.189 (0.082)FQS
MeatGyulai sausage0.466 (0.222)0.294 (0.246)Reference0.144 (0.083)0.144 (0.082)FQS
Organic pork0.018 (0.027)0.037 (0.046)FQS0.466 (0.090)0.352 (0.083)FQS
Sobrasada de Porc Negre0.017 (0.029)0.071 (0.097)FQS0.541 (0.107)0.364 (0.099)FQS
Ternasco de Aragon0.019 (0.023)0.200 (0.235)FQS0.800 (0.113)0.227 (0.121)FQS
SeafoodSaint Michel Bay bouchot Mussels0 (0)0.009 (0.010)FQS0.546 (0.092)0.499 (0.092)FQS
Phu Quoc Fish Sauce0.030 (0.026)0.103 (0.082)FQS0.405 (0.098)0.262 (0.083)FQS
Fruit / vegetableBuon ma Thuot coffee0.025 (0.030)0.085 (0.124)FQS0.246 (0.056)0.385 (0.089)Reference
Kolocsai Paprika powder0.176 (0.106)0.019 (0.025)Reference0.311 (0.089)0.285 (0.108)FQS
Kastoria apple0.041 (0.064)0.084 (0.093)FQS0.470 (0.107)0.162 (0.063)FQS
Organic raspberries0.130 (0.089)0.369 (0.177)FQS0.501 (0.126)0.200 (0.074)FQS
Organic tomato from Emilia Romagna0.092 (0.064)0.092 (0.064)None0.451 (0.092)0.451 (0.092)None

References

AMI. 2017. “Marktspiegel Milcherzeugung.” edition of 4/2017, 28.4.2017.Search in Google Scholar

Amisse, S., I. Leroux, and P. Muller. 2012. “Proximities and Logics Underlying Cluster Dynamics: The Case of the Ornamental Horticulture Cluster in Maine-et-Loire.” Industry & Innovation 19 (3): 265–83. https://doi.org/10.1080/13662716.2012.669614.Search in Google Scholar

Argyres, N. S., and J. P. Liebeskind. 1999. “Contractual Commitments, Bargaining Power, and Governance Inseparability: Incorporating History into Transaction Cost Theory.” Academy of Management Review 24 (1): 49–63. https://doi.org/10.5465/amr.1999.1580440.Search in Google Scholar

Aubry, C., and Y. Chiffoleau. 2009. “Le Développement Des Circuits Courts et l’agriculture Péri-Urbaine: Histoire, Évolution En Cours et Questions Actuelles.” In Colloque Agriculture Péri-Urbaine. 2009-05-05. Versailles.Search in Google Scholar

Barczak, A., V. Bellassen, F. Arfini, R. Brečić, G. Giraud, E. Majeski, B. Tocco, A. Tregear, and G. Vittersø. 2016. “Report Detailing the Selection of Case Study Regions and Cases for Impact Analysis.” Strength2Food deliverable 3.3.Search in Google Scholar

Barjolle, D., and J.-M. Chappuis. 2000. “Coordination des acteurs dans deux filières aoc Une approche par la théorie des coûts de transaction.” Économie Rurale 258 (1): 90–100. https://doi.org/10.3406/ecoru.2000.5196.Search in Google Scholar

Barjolle, D., and B. Sylvander. 2002. “Some Factors of Success for Origin Labelled Products in Agro-Food Supply Chains in Europe: Market, Internal Resources and Institutions.” Economies et Societes 36 (9–10): 1441–61.Search in Google Scholar

Barney, J. B. 1986. “Types of Competition and the Theory of Strategy: Toward an Integrative Framework.” Academy of Management Review 11 (4): 791–800. https://doi.org/10.5465/amr.1986.4283938.Search in Google Scholar

Bengtsson, M., and S. Kock. 2014. “Coopetition—Quo Vadis? Past Accomplishments and Future Challenges.” Industrial Marketing Management, Special Issue on Co-opetition Cooperation and Competition 43 (2): 180–88. https://doi.org/10.1016/j.indmarman.2014.02.015.Search in Google Scholar

Besanko, D., D. Dranove, M. Shanley, and S. Schaefer. 2009. Economics of Strategy. New York, NY: John Wiley & Sons.Search in Google Scholar

Blyler, M., and R. W. Coff. 2003. “Dynamic Capabilities, Social Capital, and Rent Appropriation: Ties that Split Pies.” Strategic Management Journal 24 (7): 677–86. https://doi.org/10.1002/smj.327.Search in Google Scholar

Bonnet, C., and Z. Bouamra-Mechemache. 2016. “Organic Label, Bargaining Power, and Profit-Sharing in the French Fluid Milk Market.” American Journal of Agricultural Economics 98 (1): 113–33. https://doi.org/10.1093/ajae/aav047.Search in Google Scholar

Bontemps, C., Z. Bouamra-Mechemache, and M. Simioni. 2013. “Quality Labels and Firm Survival: Some First Empirical Evidence.” European Review of Agricultural Economics 40 (3): 413–39. https://doi.org/10.1093/erae/jbs034.Search in Google Scholar

Brandenburger, A., and B. Nalebuff. 1996. Co-Opetition, 1st ed. New York: Doubleday.Search in Google Scholar

Brandon‐Jones, E., B. Squire, C. W. Autry, and K. J. Petersen. 2014. “A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness.” Journal of Supply Chain Management 50 (3): 55–73.10.1111/jscm.12050Search in Google Scholar

Bresnahan, T. F. 1982. “The Oligopoly Solution Concept is Identified.” Economics Letters 10 (1): 87–92. https://doi.org/10.1016/0165-1765(82)90121-5.Search in Google Scholar

Canfora, I. 2016. “Is the Short Food Supply Chain an Efficient Solution for Sustainability in Food Market?” In Agriculture and Agricultural Science Procedia, Florence “Sustainability of Well-Being International Forum”. 2015: Food for Sustainability and Not Just Food, Florence SWIF 2015, 8 (January), 402–7.10.1016/j.aaspro.2016.02.036Search in Google Scholar

Coff, R. W. 1999. “When Competitive Advantage Doesn’t Lead to Performance: The Resource-Based View and Stakeholder Bargaining Power.” Organization Science 10 (2): 119–33. https://doi.org/10.1287/orsc.10.2.119.Search in Google Scholar

Coff, R. W. 2010. “The Coevolution of Rent Appropriation and Capability Development.” Strategic Management Journal 31 (7): 711–33.10.1002/smj.844Search in Google Scholar

Crook, T. R., and J. G. Combs. 2007. “Sources and Consequences of Bargaining Power in Supply Chains.” Journal of Operations Management 25 (2): 546–55. https://doi.org/10.1016/j.jom.2006.05.008.Search in Google Scholar

Ditter, J.-G., and J. Brouard. 2014. “The Competitiveness of French Protected Designation of Origin Wines: A Theoretical Analysis of the Role of Proximity.” Journal of Wine Research 25 (1): 5–18. https://doi.org/10.1080/09571264.2014.871120.Search in Google Scholar

Fandos, C., and C. Flavián. 2006. “Intrinsic and Extrinsic Quality Attributes, Loyalty and Buying Intention: An Analysis for a PDO Product.” British Food Journal 108 (8): 646–62. https://doi.org/10.1108/00070700610682337.Search in Google Scholar

FAO. 2013. Sustainability Assessment of Food and Agriculture Systems Indicators. http://www.fao.org/fileadmin/templates/nr/sustainability_pathways/docs/SAFA_Indicators_final_19122013.pdf.Search in Google Scholar

Fernández‐Olmos, M., J. Rosell‐Martínez, and M. A. Espitia‐Escuer. 2009. “Vertical Integration in the Wine Industry: A Transaction Costs Analysis on the Rioja DOCa.” Agribusiness 25 (2): 231–50.10.1002/agr.20196Search in Google Scholar

Filippi, M. 2014. “Using the Regional Advantage: French Agricultural Cooperatives’ Economic and Governance Tool.” Annals of Public and Cooperative Economics 85 (4): 597–615. https://doi.org/10.1111/apce.12053.Search in Google Scholar

Filippi, M., O. Frey, and R. Mauget. 2008. “Les coopératives agricoles face à l’internationalisation et à la mondialisation des marchés.” Revue internationale de l’economie sociale: Recma 310: 31–51. https://doi.org/10.7202/1021102ar.Search in Google Scholar

Filippi, M., and P. Muller. 2013. “Le Jeu Des Communautés de Pratique Au Sein Des Coopératives Agricoles : Le Cas Des Filières Fromagères Vache d’appellation d’origine Du Massif Central.” In Les Enjeux Du Développement Régional et Territorial En Zones Rurales, edited by A. Torre, and F. Wallet, 27–58. Paris: L’Harmattan.Search in Google Scholar

France Agrimer. 2010. La Transformation Laitière Française : Évolution 2002/2008. Paris, France.Search in Google Scholar

France Agrimer. 2011. Évolution Des Structures de Production Laitière En France . Paris, France: Lait de Vache.Search in Google Scholar

Friedberg, E. 1997. Le Pouvoir et la Règle. Paris, France: Le Seuil.Search in Google Scholar

Gertler, M. S. 2001. “Best Practice? Geography, Learning and the Institutional Limits to Strong Convergence.” Journal of Economic Geography 1 (1): 5–26. https://doi.org/10.1093/jeg/1.1.5.Search in Google Scholar

Gertler, M. S. 2003. “Tacit Knowledge and the Economic Geography of Context, or the Undefinable Tacitness of Being (There).” Journal of Economic Geography 3 (1): 75–99. https://doi.org/10.1093/jeg/3.1.75.Search in Google Scholar

Giraud-Héraud, E. and L-G. Soler. 2003. “‘Quelle légitimité à des mécanismes de régulation de l’offre dans les Appellations d’origine protégée?.” Économie Rurale 277 (1): 123–34. https://doi.org/10.3406/ecoru.2003.5441.Search in Google Scholar

Gnutzmann, H., O. Kowalewski, and P. Śpiewanowski. 2020. “Market Structure and Resilience: Evidence from Potash Mine Disasters.” American Journal of Agricultural Economics 102 (3): 911–33. https://doi.org/10.1093/ajae/aaz041.Search in Google Scholar

Keeble, D., C. Lawson, B. Moore, and F. Wilkinson. 1999. “Collective Learning Processes, Networking and ‘Institutional Thickness’ in the Cambridge Region.” Regional Studies 33 (4): 319–32. https://doi.org/10.1080/713693557.Search in Google Scholar

Klein, B. 1980. “Transaction Cost Determinants of “Unfair” Contractual Arrangements.” The American Economic Review 70 (2): 356–62.10.1017/CBO9780511528248.034Search in Google Scholar

Lerner, A. P. 1934. “The Concept of Monopoly and the Measurement of Monopoly Power.” The Review of Economic Studies 1 (3): 157–75. https://doi.org/10.2307/2967480.Search in Google Scholar

Longfellow Blodgett, L. 1991. “Toward a Resource-Based Theory of Bargaining Power in International Joint Ventures.” Journal of Global Marketing 5 (1–2): 35–54. https://doi.org/10.1300/j042v05n01_04.Search in Google Scholar

Loubaresse, E., and F. Pestre. 2014. “‘Les Facteurs de Réussite d’une Stratégie Collective : Le Cas d’Interloire’.” In Stratégies Des Territoires Vitivinicoles: Clusters, Gouvernance et Marque Territoriale ; Recherche, edited by S. Charters, and V. Michaux, 209–22. MPE, Management Prospective Editions. Management & Prospective. Cormelles-le-Royal.Search in Google Scholar

Mancini, M. C., F. Arfini, and M. Guareschi. 2019. “Innovation and Typicality in Localised Agri-Food Systems: The Case of PDO Parmigiano Reggiano.” British Food Journal 121 (12): 3043–61. https://doi.org/10.1108/bfj-10-2018-0662.Search in Google Scholar

Martin, M., and C. Tanguy. 2018. “‘Proximités et construction d’une stratégie collective : application au cas de deux filières agroalimentaires’.” Géographie Économie Société 20 (4): 423–47.10.3166/ges.2019.0003Search in Google Scholar

Mérel, P. 2011. “Institutional Market Power in Comté: Insights from a “Double Marginalisation” Model.” Journal of Agricultural Economics 62 (3): 585–603. https://doi.org/10.1111/j.1477-9552.2011.00301.x.Search in Google Scholar

Morgan, K., and J. Murdoch. 2000. “Organic vs. Conventional Agriculture: Knowledge, Power and Innovation in the Food Chain.” Geoforum 31 (2): 159–73. https://doi.org/10.1016/s0016-7185(99)00029-9.Search in Google Scholar

Muller, P. 2006. “Reputation, Trust and the Dynamics of Leadership in Communities of Practice.” Journal of Management & Governance 10 (4): 381–400. https://doi.org/10.1007/s10997-006-9007-0.Search in Google Scholar

Napasintuwong, O. 2019. “PGI Hom Mali Thung Kula Rong-Hai Rice in Thailand.” In Sustainability of European Food Quality Schemes, edited by F. Arfini, and V. Bellassen, 87–109. Cham: Springer.10.1007/978-3-030-27508-2_5Search in Google Scholar

North, D. C. 1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.10.1017/CBO9780511808678Search in Google Scholar

North, D. C. 1994. “Economic Performance through Time.” The American Economic Review 84 (3): 359–68.Search in Google Scholar

Owen, P. D., M. Ryan, and C. R. Weatherston. 2007. “Measuring Competitive Balance in Professional Team Sports Using the Herfindahl–Hirschman Index.” Review of Industrial Organization 31 (4): 289–302. https://doi.org/10.1007/s11151-008-9157-0.Search in Google Scholar

Panzar, J. C., and J. N. Rosse. 1987. “Testing for “Monopoly” Equilibrium.” The Journal of Industrial Economics 35 (4): 443–56. https://doi.org/10.2307/2098582.Search in Google Scholar

Porter, M. E. 1979. “How Competitive Forces Shape Strategy.” Harvard Business Review 57 (2): 137–45.10.1007/978-1-349-20317-8_10Search in Google Scholar

Porter, M. E. 2008a. On Competition, 11th ed. Cambridge, MA: Harvard Business Press.10.1108/bl.2000.17013aae.003Search in Google Scholar

Porter, M. E. 2008b. “The Five Competitive Forces that Shape Strategy.” Harvard Business Review 86 (1): 78–93.Search in Google Scholar

Raynaud, E., M. Fernández-Barcala, and M. Gonzalez-Diaz. 2013. “European Geographical Indications: Just More Than a Brand Name.” In Journées de Recherches En Sciences Sociales (JRSS), np. Angers. France: Société Française d’Economie Rurale (SFER).Search in Google Scholar

Raynaud, E., L. Sauvee, and E. Valceschini. 2005. “Alignment between Quality Enforcement Devices and Governance Structures in the Agro-Food Vertical Chains.” Journal of Management & Governance 9 (1): 47–77. https://doi.org/10.1007/s10997-005-1571-1.Search in Google Scholar

Richards, T. J., R. M. Acharya, and I. Molina. 2011. “Retail and Wholesale Market Power in Organic Apples.” Agribusiness 27 (1): 62–81. https://doi.org/10.1002/agr.20251.Search in Google Scholar

Ring, P. S., and A. H. Van de Ven. 1994. “Developmental Processes of Cooperative Interorganizational Relationships.” Academy of Management Review 19 (1): 90–118. https://doi.org/10.5465/amr.1994.9410122009.Search in Google Scholar

Roundy, P. T., B. K. Brockman, and M. Bradshaw. 2017. “The Resilience of Entrepreneurial Ecosystems.” Journal of Business Venturing Insights 8 (November): 99–104. https://doi.org/10.1016/j.jbvi.2017.08.002.Search in Google Scholar

Shervani, T. A., G. Frazier, and G. Challagalla. 2007. “The Moderating Influence of Firm Market Power on the Transaction Cost Economics Model: An Empirical Test in a Forward Channel Integration Context.” Strategic Management Journal 28 (6): 635–52. https://doi.org/10.1002/smj.585.Search in Google Scholar

Sierra, I. 2016. “El ternasco de Aragón (historia, producción y calidad).” Cuadernos de Aragón 63: 1–122.Search in Google Scholar

Skilton, P. F. 2009. “Knowledge Based Resources, Property Based Resources and Supplier Bargaining Power in Hollywood Motion Picture Projects.” Journal of Business Research 62 (8): 834–40. https://doi.org/10.1016/j.jbusres.2008.05.001.Search in Google Scholar

Sonnino, R. 2009. “Quality Food, Public Procurement, and Sustainable Development: The School Meal Revolution in Rome.” Environment and Planning A: Economy and Space 41 (2): 425–40. https://doi.org/10.1068/a40112.Search in Google Scholar

Torre, A. 2002. “Les AOC Sont-Elles Des Clubs ? Réflexions Sur Les Conditions de l’action Collective Localisée, Entre Coopération et Règles Formelles.” Revue d’Économie Industrielle 100 (1): 39–62. https://doi.org/10.3406/rei.2002.984.Search in Google Scholar

Tregear, A., F. Arfini, G. Belletti, and A. Marescotti. 2007. “Regional Foods and Rural Development: The Role of Product Qualification.” Journal of Rural Studies 23 (1): 12–22. https://doi.org/10.1016/j.jrurstud.2006.09.010.Search in Google Scholar

Vukina, T., and P. Leegomonchai. 2006. “Oligopsony Power, Asset Specificity, and Hold-Up: Evidence from the Broiler Industry.” American Journal of Agricultural Economics 88 (3): 589–605. https://doi.org/10.1111/j.1467-8276.2006.00881.x.Search in Google Scholar

Williamson, O. E. 1981. “The Modern Corporation: Origins, Evolution, Attributes.” Journal of Economic Literature 19 (4): 1537–68.Search in Google Scholar

Wycherley, I. 2002. “Managing Relationships in the UK Organic Food Sector.” Journal of Marketing Management 18 (7–8): 673–92. https://doi.org/10.1362/0267257022780642.Search in Google Scholar

Received: 2019-09-13
Accepted: 2020-11-24
Published Online: 2020-12-14

© 2020 Walter de Gruyter GmbH, Berlin/Boston

Scroll Up Arrow